---

Poverty and Inequality

The hon. Gentleman is absolutely right and makes a good point, and I will mention in a few moments some specific things my party would like to see done. We certainly oppose the recent freeze, as we do not believe that pensioners should be the first to feel the pain of the recession. Freezing parts of the state pension would be a blow to those pensioners who already live on or near the poverty line. The woeful inadequacy of the basic state pension is a legacy of successive Governments. Since the link to which he referred was broken 30 years ago, the pension has simply withered away, and the Government have done nothing to reverse that trend. The whole pensions edifice is built on a totally inadequate foundation, and until that problem is addressed all other pension reform will be merely tinkering at the edges. Four million pensioners are poor enough to be entitled to means-tested pension credit, and that number will rise to encompass half of all pensioners by 2050. Is that something we ought to be proud of? About one third of those who are entitled to claim pension credit do not do so, partly because of the complexity of the system and partly because they do not want to spend their lives asking for handouts. The Liberal Democrat party is the only party that has pledged to restore the earnings link immediately rather than by the end of the next Parliament or beyond, and we would like a target to be enshrined in legislation to eradicate pensioner poverty in the same way that this Government set a target on child poverty in the 2010 Act. We believe that a decent state pension is the key to a solid foundation for retirement, and our goal is to introduce a citizens pension that would give people a full pension regardless of their contributions. It would gradually be raised high enough to lift people out of means-testing. Several other policies would be particularly beneficial to pensioners. For example, we propose that the personal tax allowance be raised to £10,000 for everyone—the hon. Member for Birmingham, Selly Oak referred to this—so that no pensioner with total income below that amount would pay any income tax. That would benefit most tax-paying pensioners to the tune of some £100. We also propose to abolish council tax and replace it with a local income tax that is based on the ability to pay, which would be of huge benefit to most pensioners. They would pay less under a local income tax than they do under council tax. My party welcomes the Government's plan to auto-enrol workers in personal accounts under the new National Employment Savings Trust scheme, as only one half of today's work force is currently paying into a private pension. However, that will work only if the Government are prepared to ensure that employer contributions are at a much higher level. The proposed contribution levels for personal accounts do not go far enough to ensure decent provision. Poverty among working-age adults without dependent children is now at its highest since data were first collected in 1961. That is because the Government have focused their policies overwhelmingly on families with children. We understand that, but we should not disadvantage families who do not have children. Of course, some of the biggest casualties of the recession have been young people. More than 700,000 18 to 24-year-olds are out of work, and that can be a real disadvantage for them as they start their working lives. We need to intervene and offer help far earlier than we do. My party has pledged to offer young people access to further education, internships and train-to-work programmes after 90 days out of work. We do not think it is right to abandon young people, often in the midst of their first attempts to find work and start a career, for up to six months without a chance to do something to improve their employability. We would offer all those young people the £55 a week jobseeker's allowance rate as a training allowance while they complete a three-month internship with an employer. We believe that the next Government must continue to invest to stimulate the economy and create jobs. We want to rebalance the British economy and build it again on solid, sustainable and green foundations. We have identified £3.5 billion of current Government expenditure that could fund an economic stimulus and job creation plan. Together with our banking reforms, which will end the dependence of the British economy on the City of London, that plan will kick-start economic growth on stronger foundations than before, and ensure that growth and jobs last as they should. As we face the election, which is being called today, there are several steps that can be taken in an attempt to stop a further rise in poverty and inequality. The question at this election is whether the next Government will aspire to such aims. A Liberal Democrat Administration certainly would.